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Labor Market Pooling, Outsourcing and Labor Contracts

  • Pierre M. Picard
  • David E. Wildasin

    ()

    (CREA, University of Luxembourg)

Economic regions, such as urban agglomerations, face external demand and price shocks that produce income risk. Workers in large and diversified agglomerations may benefit from reduced wage volatility, while firms may outsource the production of intermediate goods and realize benefits from Chamberlinian externalities. Firms may also protect workers from wage risks through fixed wage contracts. This paper explores the relationships between firms’ risks, workers’ contracts, and the structure of production in cities.

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File URL: http://wwwen.uni.lu/content/download/23993/291641/file/2009-05_Labor%20Market%20Pooling,%20Outsourcing%20and%20Labor%20Contracts.pdf
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Paper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 09-05.

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Date of creation: 2009
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Handle: RePEc:luc:wpaper:09-05
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